Tech stocks slump before holiday weekend

The Nasdaq composite index dropped 30.99 to 2,251.03 on relatively light volume ahead of the long Memorial Day weekend. The Dow Jones industrial average slipped 117.05 to 11,005.37.

A revision to gross domestic product numbers was the big economic news Friday. U.S. economic growth in the first three months of the year was slower than previously thought as companies cut back on their inventories at the fastest pace in 18 years, the Commerce Department said.

GDP, the broadest measure of economic activity, grew at a 1.3 percent annual rate in the first quarter, up from the 1 percent clip seen in the final three months of 2000, but well below what many economists think is sustainable. Previously, growth had been estimated at a 2 percent rate.

Investors took in three other economic reports Friday.

The University of Michigan's final May consumer sentiment index, which measures consumers' attitudes about the economy, rose in May, stemming a sharp slide that began late last year and suggesting consumers may have remained upbeat despite corporate layoffs.

The index rose to 92 in May from 88.4 in April, down only slightly from the preliminary reading released mid-month, which was 92.6.

Durable goods orders, another measure of consumer confidence, fell 5 percent last month to $184.74 billion after a 2.2 percent rise in March, the Commerce Department said Friday. The orders are for big-ticket manufactured goods such as aircraft, cars and computers.

Sales of existing homes in the United States fell 4.2 percent in April, raising concerns that the economic slump is spreading to the housing market--a sector previously seen as a bright spot. The National Association of Realtors said April sales of existing U.S. homes fell to an annual rate of 5.2 million units from a revised annual rate of 5.43 million in March.

Heavily traded technology stocks included Cisco Systems, down 86 cents to $22.05; Intel, down 11 cents to $29.10; Sun Microsystems, down 99 cents to $20.47; Microsoft, down 81 cents to $70.91; and Dell Computer, up 33 cents to $27.

On the New York Stock Exchange, AT&T dropped 4 cents to $21.06, and Nortel Networks retreated 45 cents to $14.60.

Semiconductor equipment stocks were mixed despite an analyst upgrade. Applied Materials fell 71 cents to $53.71, Teradyne was up 57 cents to $44.49, and KLA-Tencor fell 46 cents to $56.61 after Prudential Securities analyst Shekhar Pramanick upgraded them to "strong buy" from "accumulate."

Oracle shares were down 79 cents to $16.51 after a J.P. Morgan H&Q analyst said the company's current fourth quarter is tough, and things don't look good for the software giant's upcoming earnings.

Transmeta, up 39 cents to $14.49, announced it will license some of AMD's technology. AMD fell a penny to $31.94.

Telecommunications-equipment giants Lucent Technologies, off 13 cents to $9.40, and Alcatel, down $1.35 to $38.11, will work through the weekend on a merger agreement, sources said.

Shares in ADC Telecommunications fell $1.69 to $8.60 after the U.S. telecom gear maker on Thursday posted a $1 billion quarterly net loss and was downbeat on the rest of the year.

TiVo rose $2.71 to $11.21. The company on Thursday reported quarterly results and announced a patent win.

Staff and Reuters contributed to this report.